Online Meeting Auction a First Online auctions--they're fast, easy, and fun. But can the concept work for meeting industry commodities? Event-Source.com says the answer is yes and proved it with the first-ever meetings auction service on the Internet, in which hotels are the buyers and planners are the sellers.
Ed Sarraille, EventSource.com president and CEO, calls it a "reverse auction" and describes the practice as a "real-time bidding war driven by dynamic pricing that lets market forces take their course." In this case, the commodity is a block of room nights a meeting planner needs to book, and the bidders are hotels interested in the business--basically it's a virtual RFP process.
Certain criteria qualify an auction candidate: the meeting must be fewer than 180 days out; it must involve only one city; and the meeting must have a minimum of 50 room nights on its peak night. When the meeting planner gives the go-ahead for the auction, EventSource distributes the specs to properties whose location, facilities, and general rate structure meet the request for proposal.
After evaluating the specs for the meeting from the planner, hotels can then "RSVP to us," Sarraille says, characterizing his firm as the go-between for meeting planners and properties. The EventSource database lists more than 11,000 properties, which pay a one-time fee to become members.
Built into the preliminary process is a 10- to 14-day period between the initial invitation to hotels and the auction date to allow the meeting planner time to make site visits. Also before the auction, the planner makes the choice of designating the low bidder as the winner or selecting the winning hotel based on factors other than price alone.
When pre-auction steps are complete, the fun begins. EventSource assigns participating hotels paddle numbers, just as the big auction houses do for their bidders. In the EventSource version, however, the hotels don't know whose paddle belongs to whom, although the hotels know up-front who is participating. Sarraille says that even after the auction ends, the room rates bid by each hotel are never divulged.
"Everything is on the table before and during the auction," Sarraille says, "except the prices--that's the dynamic part of it."
The action unfolds in an online chat room, which is accessed only by passwords and identifications assigned by EventSource. The auction held on October 20 was actually the first EventSource had opened to the press. (Two trial auctions were held prior to that.) Observers, through assigned passwords, were able to watch the four rounds of bidding action online. On the block was a Washington, D.C., meeting in March 2000 for 100 room nights, and the bidders were the Omni Shoreham, Madison, Renaissance, and Wyndham Washington hotels. The event lasted about 20 minutes, the time limit set by EventSource, and the speed of the transaction might be the big attraction to both page 10 meeting planners and hoteliers.
Pam Taylor, meeting and training director for Colorspot Nursery, based in Pleasant Hills, Calif., had a training event to set up in California recently. Taylor is an EventSource client and although she was unfamiliar with the online auction concept, she decided to jump in when EventSource presented her with the opportunity to do so. She participated in one of the trial auctions and says she'll be doing it again.
"It was a little hectic," Taylor says, "but the [EventSource] staff was very helpful. The whole thing was over and done with in 15 minutes and I didn't have to get in contact with all those different hotels for my meeting."
Money Making? For now, EventSource, which makes its money on the auction by charging a standard 10 percent commission to the winning hotels, will hold future online auctions when the situation is right, but Sarraille says the auction service will eventually become one of his company's core products.
Speaking of products, EventSource launched another last month, a service called Event Tracker, which allows association and corporate meeting planners to track the status of their meeting and open RFPs on the Web.
According to Sarraille, the secure service works like an online package delivery tracker: Planners can access it 24 hours a day/seven days a week to monitor the course of their events. One feature of the new service, which Sarraille says was born from frequent customer requests, is an e-mail alert to planners when a new hotel bid response has been added to their personalized and secure summary page.
At press time, we received word of another player in the online auction game: StarCite.com, which is a spin-off company of Philadelphia-based McGettigan Partners, a leading meeting and incentive travel management firm. StarCite.com unveiled its online auction feature at a bash at the Waldorf-Astoria in New York City on November 30. StarCite's entry into the market could signal the beginning of a trend. Going once, going twice . . . -- Anna Chinappi